Restructuring is an inevitable reality for many organisations – however, the way in which this is done requires careful consideration. Recent news has shone a light on the practice of ‘fire and rehire’, where employees are dismissed and offered employment on new contracts. This is often a controversial practice, with organisations being allowed to make changes where negotiations have been unsuccessful.
To restructure with Good Employment in mind means to consider all available options, communicate these with your employees, and to be compassionate along this journey. In June, we had a Supporters Network Event on restructuring done right, where we explored the practical information on how organisations can restructure with good employment practice in mind. This blog summarises the guidance from the panel, with more information to be found in the full recording, and resource list available at the end.
Fire and Rehire
Whilst it is not unlawful to use the practice of fire and rehire, Acas guidance has the clear message that the practice should always be seen as the last resort, with all other options considered first. Start with thinking: what do you want to achieve as an organisation? Are there other routes to this? Do you really need to make changes to existing employment contracts, or can they be adjusted to apply to new starters instead? There are a number of different ways to restructure, that ought to be considered first and foremost.
The Government has announced a new statutory code of practice surrounding Fire and Rehire. Whilst its contents are currently unclear, it’s likely to entail greater financial penalties for companies who ‘Fire and Rehire’, if an employee makes a claim. This is something to consider moving forward.
Communicate during the process
Communication is key to this process – so start early, give employees time to digest the information and what this process could mean to them. Ask for feedback and listen with an open mind.
Involving the employees throughout the process will ensure that, even if the result is unpopular, that the trust and communication with employees has not been lost. They will be well informed on the process, why the decision is being made, and why other routes were not taken.
Think about who the information needs to be shared with, and in what order, to ensure that things are handled in a controlled and sensitive manner. This process of communication may need to involve Trade Unions, who will be able to ensure that a consistent message is shared across employees - and will be able to act as the conduit to bring messages back up. If there isn’t trade union involvement, ensure that sufficient training is provided for those handling this process.
Lead with compassion
Ultimately, a restructuring process is going to be difficult for people. Job changes and job losses on the horizon will unsettle employees – who may have issues outside of work, financial pressures, and fears about what will happen next.
The shift to more remote working also means that these conversations may be had virtually – adding extra difficulties to navigate this process without the physical ability to be compassionate, or sensitive in the same way.
It's important that people don’t hear information relevant to their job role second-hand, so ensure that the order that information is distributed is appropriate. If a team isn’t impacted, tell them they’re not impacted, as reducing anxieties where possible is essential here.
Getting this process wrong can lead to several issues. This includes formal legal challenges, but also loss of goodwill. People may lose morale, motivation, and commitment, leading to potential loss of good talent – with people finding more secure employment elsewhere. The reputational damages could be significant, with people remembering in time to come where an organisation went wrong with this.
Ensure that your organisation is well prepared when considering a restructure – with a thoughtful planning stage, strong communication throughout, and a key understanding of emotions as this process is navigated.
- Lee Jefcott, Partner at Brabners
- Mark Makin, Senior Advisor at Acas
- Carrie Westwell, Director of People & Culture at Peel Land & Property Group